Meta Platforms (META) agreed to settle a major social media addiction case with state attorneys general this week, ending the trial midway through its second week.
The settlement sent Meta’s stock climbing as much as 5% in premarket trading after the news broke, though shares pared some of those early gains.
The case was presided over by US District Judge Yvonne Gonzalez Rogers in Oakland, California, and centered on allegations from 29 states.
Attorneys general alleged that Instagram and Facebook deliberately designed their products to hook young users while harvesting data from children under 13.
According to court filings, Meta denied any wrongdoing as part of the agreement and committed to paying up to $16.68 billion to resolve the claims.
Several state attorneys general cited a $17.1 billion settlement figure, a number that includes more than $459 million tied to the separate Cambridge Analytica case.
Meta said it expects to “accrue a legal expense of approximately $10 billion in the third quarter of 2026 related to the agreement,” which had not been previously factored into its financial outlook.
The settlement requires Meta to implement daily usage limits and nighttime blocks for teenage users, along with enhanced age assurance measures to prevent underage access to its platforms.
Parents and guardians will also receive additional tools under the terms of the agreement, giving families more oversight over how minors interact with Instagram and Facebook.
The trial was co-led by California Attorney General Bonta alongside the attorneys general from Colorado, New Jersey, and Kentucky, representing a bipartisan coalition of 29 states.
The combined case stemmed from a 2023 lawsuit, and proceedings featured testimony from Instagram head Adam Mosseri as well as current and former Meta employees.
Meta CEO Mark Zuckerberg had also been expected to testify before the two sides reached their agreement and brought the trial to a close.
Meta and Alphabet’s (GOOGL) YouTube had previously lost a California social media harm case that resulted in a $6 million award, while Meta separately faced a more than $940 million judgment in a New Mexico case.
Meta, Alphabet, Snap (SNAP), and TikTok collectively face more than 3,000 personal injury claims from US families and individuals, plus 1,300 lawsuits from public school districts across the country.
